- The UAE updated its tax laws to exempt crypto transactions from value-added tax.
- The change will take effect on November 15 but retroactively apply to transactions from January 1, 2018.
The UAE government amended its regulations around value-added tax laws to exclude digital assets and transactions involving them.
The document published by the Federal Tax Authority (FTA) of the UAE also exempted the activities of investment funds that manage digital assets, and the transfer of ownership of assets and their conversion to or from fiat from value-added tax.
This development is part of a wider streamlining of digital asset regulations by various regulatory authorities within the UAE. For example, the Securities Commodities Authorities (SCA), UAE’s premier financial regulatory authority, partnered with Dubai’s authority, the Dubai Virtual Asset Regulatory Authority (VARA), to jointly oversee digital asset service providers operating within both nations.
A wider push for legitimacy
The UAE’s amendment to its crypto tax laws lends more legitimacy to digital assets within the region as the same VAT exemption is also applied to traditional financial firms and transactions.
According to PwC, virtual assets within the UAE are considered as a “representation of value that can be digitally traded or converted and can be used for investment purposes.”